Major businesses kick DEI to the curb because of political pressure, government moves
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Once embraced as a moral imperative and business imperative in the wake of the 2020 protests, diversity, equity and inclusion (DEI) programs are now under intense political and regulatory scrutiny. Major companies — from Walmart to Google — are scaling back these initiatives, as the Trump administration condemns DEI with federal contractors and activist pressures mount.
In this volatile environment, many leaders are exploring an alternative approach: decision-making frameworks grounded in evidence-based, merit-driven processes.
Over the past few months, DEI initiatives have increasingly become a lightning rod for controversy. A growing list of U.S. companies, including Target, Meta Platforms, Amazon, McDonald’s and Ford, is retreating from DEI commitments in response to mounting legal and political pressures.
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For example, Tractor Supply eliminated several DEI roles and abandoned sponsorship of events like Pride Month following vocal criticism from conservative circles. Similarly, Walmart phased out supplier programs specifically designed to support minority and LGBTQ-owned businesses. Such moves highlight the growing political and cultural divide over how companies should address diversity and inclusion in the workplace.
Walmart is one of many top US firms that have moved away from DEI. FILE: The Walmart in Beavercreek, Ohio. (Google Maps)
Federal government actions have only accelerated the trend. In his second term, President Donald Trump signed a series of executive orders aimed at dismantling DEI initiatives within federal agencies.
These orders, which have resulted in placing DEI staff on administrative leave and even compiling watchlists of federal employees engaged in equity efforts, have created an atmosphere of uncertainty. When even government policies become subject to ideological battles, corporate leaders are increasingly wary of investing in programs that may attract controversy or legal challenges.
In response, many organizations have experimented with rebranding their DEI initiatives, replacing the term "diversity, equity, and inclusion" with alternatives like "belonging" or "culture-building." However, these rebranding efforts often fall short.
Critics view them as cosmetic changes that do not address the fundamental concerns regarding fairness or meritocracy. For DEI supporters, rebranding can signal capitulation to political pressure, leading to internal dissent and decreased morale. The result is a delicate balancing act where companies risk pleasing neither side.
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An emerging solution is to shift the focus from identity-based programs to structured, science-based decision-making frameworks. These frameworks emphasize objective criteria, measurable outcomes and transparent processes to foster an environment where fairness and inclusion are embedded in everyday business practices.
By concentrating on decision-making processes, organizations can achieve many of the same benefits promised by DEI — such as improved hiring practices, fairer promotions and more collaborative teamwork — without attracting the same level of controversy.
For example, structured hiring practices — where standardized interview questions and scoring rubrics replace subjective judgments — have been shown to double the predictive validity of job performance compared to unstructured interviews. Similarly, implementing evidence-based promotion policies tied to measurable achievements ensures that advancement is based on merit rather than personal bias.
In response, many organizations have experimented with rebranding their DEI initiatives, replacing the term "diversity, equity, and inclusion" with alternatives like "belonging" or "culture-building." However, these rebranding efforts often fall short.
Even collaborative decision-making processes that actively seek input from diverse perspectives can help companies avoid groupthink and drive innovation. These practices not only reduce the impact of unconscious bias but also align closely with the strategic goals of improving productivity and financial performance.
Recent research supports this approach. Research from McKinsey has consistently demonstrated that companies with diverse leadership teams are significantly more likely to outperform their peers. Companies that have diverse teams achieve better innovation, according to a Deloitte report.
By grounding decisions in objective, data-driven frameworks, companies can sidestep the ideological debates surrounding DEI while still capturing the benefits of diverse viewpoints and inclusive practices. This focus on outcomes rather than optics is particularly attractive in today’s environment, where investors and market analysts are increasingly scrutinizing corporate governance and operational efficiency.
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Gleb Tsipursky, Ph.D., serves as the CEO of the hybrid work consultancy Disaster Avoidance Experts and authored the best-seller "Returning to the Office and Leading Hybrid and Remote Teams."
